ATTORNEY FOR PETITIONER: ATTORNEY FOR RESPONDENT:
ROBERT A. ANDERSON PAUL S. WARD
KRIEG DEVAULT GALVIN ATTORNEY AT LAW
Hammond, IN Indianapolis, IN
INDIANA TAX COURT
WITTENBERG LUTHERAN VILLAGE )
ENDOWMENT CORPORATION, )
v. ) Cause No. 45T10-0202-TA-24
LAKE COUNTY PROPERTY TAX )
ASSESSMENT BOARD OF APPEALS, )
ORDER ON PARTIES CROSS-MOTIONS FOR SUMMARY JUDGMENT
January 24, 2003
Wittenberg Lutheran Village Endowment Corporation (Wittenberg) appeals the final determination of the Indiana
Board of Tax Review (Indiana Board) denying it a property tax exemption for
the 1999 tax year. The matter is before the Court on the
parties cross-motions for summary judgment. The sole issue for this Court to
decide is whether the portion of Wittenbergs retirement community known as the Villas
qualifies for a charitable exemption under Indiana Code § 6-1.1-10-16.
FACTS AND PROCEDURAL HISTORY
Wittenberg is an Indiana not-for-profit corporation affiliated with the Lutheran Church.
owns and operates Wittenberg Lutheran Village (Village), an integrated retirement community in Crown
Point, Indiana. The Village includes a nursing home,
an assisted living
a chapel, and eighteen buildings, each containing four residential units. Collectively,
these eighteen buildings are known as the Villas.
The Villas cater to independent, active seniors who are at least sixty years
In addition to providing the amenities found in traditional apartment living,
the Villas offer many unique and special services to its residents. For
instance, each apartment is equipped with safety features (such as bathroom grab bars)
and is wheelchair accessible. All units are built on a crawl-space foundation,
providing less stress on elderly bones and joints than slab foundations.
Chaplaincy and worship services are available to all Villa residents.
may participate in a wide range of free planned group activities and have
free access to exercise equipment within the Village. They may use the
Village mini-bus for regularly scheduled shopping, planned group outings, and health-related appointments at
nearby medical facilities. In addition, Villa residents may volunteer in the assisted
living facility or the nursing home.
For an additional fee, Villa residents may dine in the central dining room
of the nursing home or the assisted living facility. Regularly scheduled housekeeping
is also available for an additional fee. If needed, a resident may
purchase assistance with daily activities such as bathing, dressing, grooming, feeding, as well
as administering medication. The Village has a medical director who will see
residents of the Villas for scheduled appointments. Independently certified physical therapists, as
well as dentists and podiatrists, also schedule regular on-site office hours. The
Villa residents can contact the round-the-clock nursing staff at the nursing home for
any medical emergencies.
Pursuant to an agreement with Wittenberg (Villa Agreement), a resident may purchase a
right of occupancy in a Villa unit for a three, five, seven or
fifteen-year term, paying both a monthly Residents Fee (which is prepaid through an
advance deposit) and a Service Fee (which may be drawn against that deposit).
Title in the unit does not transfer to the resident, but is
always maintained by Wittenberg. Accordingly, at the end of the occupancy term,
residents may either leave the unit or enter into a new agreement with
If in the event a resident leaves the Villas prior to the expiration
of its occupancy term, the Residents Fee is, for the most part, refundable.
Furthermore, the Villa Agreement provides:
It is the declared policy of the HOME that the RESIDENT will not
be terminated solely by reason of the financial inability of the RESIDENT to
pay the monthly fee, if the RESIDENT has applied for and established facts
which justify special financial consideration and dispensation, and if such application can be
granted without impairing the ability of HOME to operate on a sound financial
basis and maintain the HOME for other residents. Further, the RESIDENT agrees
not to impair his or her ability to meet financial obligations hereunder by
transferring assets after securing occupancy, without the consent of the home other than
to meet ordinary and customary living expenses.
(Cert. Admin. R. at 8-9.) Residents of the Villas have priority, subject
to availability, to be moved to the assisted living or nursing home facilities
within the community should the need arise. STANDARD OF REVIEW
Prior to 1999, the Village (in its
entirety) was exempt from Indianas property tax pursuant to the charitable exemption of
Indiana Code § 6-1.1-10-16. On December 5, 2000, however, the Lake County
Property Tax Assessment Board of Appeals (PTABOA) issued a notice to Wittenberg revoking
the portion of the exemption as it applied to the Villas for the
1999 tax year.
Wittenberg subsequently sought review of the PTABOAs revocation with
the State Board of Tax Commissioners (State Board). After an administrative hearing,
the Indiana Board
issued a final determination upholding the PTABOAs revocation of the
On February 27, 2002, Wittenberg timely filed an original tax appeal, naming the
PTABOA as Respondent.
On August 14, 2002, the PTABOA filed a motion
for summary judgment. On August 15, 2002, Wittenberg filed its motion for
summary judgment. The Court held a hearing on both motions on November
14, 2002. Additional facts will be supplied as necessary.
This Court gives great deference to final determinations of the Indiana Board when
it acts within the scope of its authority. Miller Village Prop. Co.,
LLP v. Indiana Bd. of Tax Review, 779 N.E.2d 986, 988 (Ind. Tax
Ct. 2002). Consequently, the Court will reverse a final determination of the
Indiana Board only if it is:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(2) contrary to constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory jurisdiction,
authority, or limitations;
DISCUSSION AND ANALYSIS
(4) without observance of procedure required by law; or
(5) unsupported by substantial or reliable evidence.
Ind. Code § 33-3-5-14.8(e)(1)-(5) (Supp. 2001).
Summary judgment is proper only when no genuine issues of material
fact exist and the moving party is entitled to judgment as a matter
of law. See Ind. Trial Rule 56(C). See also Dana Corp.
v. State Bd. of Tax Commrs, 694 N.E.2d 1244, 1246 (Ind. Tax Ct.
1998). Cross motions for summary judgment do not alter this standard.
Salin Bancshares v. Indiana Dept of State Revenue, 744 N.E.2d 588, 591 (Ind.
Tax Ct. 2000).
While all tangible property in Indiana is generally subject to taxation, see Ind.
Code § 6-1.1-2-1, the legislature has provided that [a]ll or part of a
building is exempt from property taxation if it is owned, occupied, and used
. . . for educational, literary, scientific, religious, or charitable purposes. Ind.
Code § 6-1.1-10-16(a). See also Ind. Const. art. X, § 1 (enabling
the legislature to grant such an exemption.) At issue in this case
is whether the Villas are owned, occupied, and used for a charitable purpose
and therefore exempt from property tax under Indiana Code § 6-1.1-10-16(a).
The PTABOAs position is that because the Villas do not cater to the
ill or infirm, they are nothing more than a traditional apartment complex.
Consequently, it asserts that the Indiana Board did not abuse its discretion in
denying the Villas a property tax exemption when it held
[t]he property is used as a normal residence, pure and simple. The
occupants may avail themselves of certain amenities that make their lives more pleasant,
but the Board cannot find a meaningful difference between the benefit the Villa
residents receive and the benefit that any other neighborhood association or private community
may provide its residents who have selected to live there based on the
comforts afforded them by the organizational structure.
 Residents of the Villas are by definition not in need. They
are necessarily financially sound and physically well or else they would not be
allowed to enter the agreements with [Wittenberg], and could be asked to leave
should that physical or financial status change.
(Cert. Admin. R. at 87-88.)
Wittenberg, on the other hand, explains that the Village is designed to provide
a suitable environment for elderly persons where they may have peace, care and
security in a Christian atmosphere. (Petr Br. at 3 (internal citation omitted).)
In turn, because seniors require different types of care at different stages
of their later years, the Village offers a continuum of care to meet
those varying needs. The Villas . . . provide one element of
[that] continuum of care in that its residents have a variety of services
available to them . . . that are not available to individual elderly
persons residing in their own homes. Transportation, social interaction, housekeeping, on-sight medical
care and housing . . . are a few of the more important
benefits[.] (Petr Br. at 9-11.) The provision of these benefits, Wittenberg argues,
constitutes a charitable purpose. Wittenberg is correct.
Nearly seven years ago, this Court interpreted the meaning of charitable purpose in
a case with a fact pattern very similar to this one: Raintree
Friends Housing, Inc. v. Indiana Department of State Revenue, 667 N.E.2d 810 (Ind.
Tax Ct. 1996). In Raintree, the taxpayers, owners of several assisted living/congregate
support facilities in Indiana, were entitled to a charitable exemption from Indianas gross
income tax, sales tax, and food and beverage tax. The Court, in
reviewing the facts of that case, stated:
In addition to providing the amenities found in traditional apartment living, the Retirement
Homes offer many unique and special services to their residents.
Specifically, each apartment is equipped with hallway and bathroom grab bars, as well
as emergency pull cords and smoke detectors which alert the 24 hour support
services office. Some of the apartments are specially designed to accommodate persons
in wheel chairs. On-site cafeterias serve three meals each day seven days
a week. Qualified nurses [aides] or L.P.N.s are on staff to assist
residents with their medications and provide other minor medical testing and assistance.
An activities director plans on and off site social functions, takes residents on
errands, and arranges for clergy from the community to come in and conduct
Sunday worship services. A variety of pay-for-use services are specially provided for
residents who need assistance with tasks such as bathing, doing laundry, housekeeping, scheduling
and attending doctors visits, and running errands.
Before admitting residents, the Retirement Homes require that prospective residents provide proof that
they are financially able to live independently or provide their own care givers.
Prospective residents who do not meet these requirements are denied admittance.
However, if a resident has difficulty paying his or her monthly rent, the
Retirement Home works with that resident to find additional resources or reduces specific
costs so that the resident can continue to live in the facility.
Furthermore, if a resident is no longer ambulatory or mentally alert, the Retirement
Home will assist the resident in obtaining private duty care or moving to
a nursing home or other facility designed to meet his or her needs.
Raintree Friends Housing, Inc. v. Indiana Dept of State Revenue, 667 N.E.2d 810,
812 (Ind. Tax Ct. 1996) (footnotes omitted).
While the Court finds it hard to distinguish the facts in this case
from those in Raintree, the PTABOA contends they are distinguishable. Specifically, it
asserts there are neither medical personnel nor cafeteria facilities located in the Villas.
(Respt Mot. for Summ. J. at 6.) The PTABOA misses the
In Raintree, this Court stated:
Caring for the aged is a recognized benefit to the community at large
and society as a whole. Indiana law recognizes that the aged require
care and attention entirely independent of financial needs, and that present day humanitarian
principles demand that those in their declining years have the opportunity to live
with as much independence as their strength will permit, in as pleasant and
happy surroundings as their finances will reasonably justify. Thus, by meeting the
needs of the aging, namely, relief of loneliness and boredom, decent housing that
has safety and convenience and is adapted to their age, security, well-being, emotional
stability, and attention to problems of health, a charitable purpose is accomplished.
Id. at 814-15 (internal citations and punctuation omitted). Accordingly, and contrary to
the PTABOAs rationale, the needs of senior citizens are not exclusively financial, nor
are they merely health-related. Indeed, seniors also need a sense of community
and involvement. Id. at 815. Seniors need a sense of security
and safety. Id. Seniors need social interaction. Id. Seniors
need supportive services that enable them to live more independently for a longer
period of time. Id. Seniors need to function at active levels.
Id. The Villas meet all these needs and are thus
owned, occupied, and used for a charitable purpose. CONCLUSION
In its final determination, the Indiana Board stated in Raintree . . .
[the Court] may have intended for such arrangements to be considered charitable, but
the Board cannot reach that conclusion. (Cert. Admin. R. at 88.)
Under Indiana Code § 33-3-5-14.8(e)(1), the Boards final determinations must be in accordance
with the law, which includes following existing precedent such as the Courts holding
in Raintree. The final determination of the Indiana Board is not
in accordance with the law and is therefore REVERSED.
For the reasons stated above, the Court now GRANTS Wittenbergs motion for summary
judgment and DENIES the Lake County Property Tax Assessment Board of Appeals motion
for summary judgment. The case is REMANDED with instructions to grant the
charitable exemption to Wittenberg for the Villas.
SO ORDERED THIS 24th DAY OF JANUARY, 2003.
Thomas G. Fisher, Judge
Indiana Tax Court
Robert A. Anderson
KRIEG DEVAULT GALVIN
5231 Hohman Avenue
Hammond, Indiana 46320
Paul S. Ward
Attorney at Law
8425 Woodfield Crossing, Suite 100
Indianapolis, Indiana 46240
Wittenberg is owned by approximately 160 northern Indiana Lutheran congregations.
Footnote: Wittenbergs nursing home, Wittenberg Manor, caters to those seniors who need
either short or long term care. Certain wings of the facility are
devoted to special purposes, such as Alzheimers care, hospice, or intensive nursing care.
Footnote: Wittenbergs assisted living facility, Wittenberg Suites, provides its residents with individual
apartments that are equipped with an emergency response system. The Suites provide
a complete dining program, housekeeping, and transportation services. A front-desk staff is
on-duty twenty-four hours per day.
Footnote: The residents spouses are eligible to live in the Villas, even
if they themselves are not yet age sixty. Most Villa residents are
between the ages of eighty and eighty-two.
Footnote: Each resident has exclusive use of his or her own
apartment, which includes two bedrooms, a private kitchen and bath, individually controlled heat
and air-conditioning, smoke detectors, a master television antenna, as well as access to
a coin-free washer and dryer. Wittenberg provides maintenance of the apartments and
Footnote: Village residents are not required to be members of the Lutheran
Footnote: For instance, a 15-year term of occupancy costs $76,600, which is
all prepaid. Each month, $425 is drawn against that deposit to cover
the monthly Residence Fee. The Monthly Service Fee is an additional $200
per month. If the resident fails to pay the service fee, the
money is withdrawn against the advance deposit.
The PTABOA did not, however, contest the charitable exemption as it
applied to Wittenbergs nursing home, assisted living facility, and chapel.
On December 31, 2001, the legislature abolished the State Board.
Pub. L. No. 198-2001, § 119(b)(2). Effective January 1, 2002, the legislature
created the Indiana Board of Tax Review (Indiana Board) as successor to the
Ind. Code §§ 6-1.5-1-3; 6-1.5-4-1 (Supp. 2001); Pub. L. No.
198-2001, § 95. Consequently, when a final determination was issued in Wittenbergs
appeal in January 2002, it was issued by the Indiana Board.
Effective January, 1, 2002, the legislature also changed the requirements for
filing an original tax appeal. Indeed, Indiana Code § 6-1.1-15-5(b)(1) now provides
that the following are parties to judicial review of a final determination by
the Indiana Board: [a]  township assessor, county assessor, member of a
county property tax assessment board of appeals, or county property tax assessment board
of appeals that made the original assessment determination under appeal[.]
§ 6-1.1-15-5(b)(1). See also Ind.Tax Court Rule 4(B)(2)(a) (2002) (providing that [i]n
original tax appeals initiated by taxpayers, the named respondents shall be as follows:
. . . the local governmental official or entity that made the original
assessment valuation, exemption determination, or other determination under the tax laws that was
the subject of the proceedings before the Indiana Board of Tax Review).
Footnote: Our Supreme Court recently stated in dictum, however, that the Tax
Court would apply the standard of review set forth in the Administrative Orders
and Procedures Act, Indiana Code § 4-21.5-5-14(d), and not Indiana Code § 33-3-5-14.8.
State Bd. of Tax Commrs v. Garcia, 766 N.E.2d 341, 345 (Ind.
The PTABOA refers to the fact that in Raintree, residents were
required to eat at least one meal per day in a central cafeteria.
The apartments in Raintree were also equipped with emergency pull-cords for alerting
the on-site nursing staff.